Payroll Compliance for Business Travelers

Payroll Compliance for Business Travelers:
What You Need To Know
Presented by: Vic Arora CPA & Co-Founder, Blackspark

©2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.
Our Presenter
Vic Arora, Co-Founder
Qualified as a Canadian Chartered Accountant in
1997 with Ernst & Young where he was a member
of the Human Capital practice.
Worked with clients on tax related aspects of employee movement
including coordination of tax compliance, compensation reporting,
and tax planning.
Co-founded Epoch Integration Inc. in 2001, an enterprise wireless
venture whose success led to its to acquisition by Blackberry (RIM)
in 2006.
Consultant to PricewaterhouseCoopers' International Assignment
Services practice
Co-Founded Blackspark Corporation.

AGENDA
……
>Meet Blackspark
>Payroll Obligations and the Impact
>Beating Complexity through Integration and Automation
AGENDA

ABOUT BLACKSPARK
Based in Toronto, Ontario

Employees create payroll obligations when they travel but…..
The payroll team has no idea:
when
where and
for how long they’re traveling
THE PAIN

THE PAIN

John Smith:
lives in Texas and travels to California 24 days a year
annual salary is US$150,000, works 240 days a year.
Taxable in California for:
24 days/240 days x $150,000 = $15,000
AN EXAMPLE

California, Colorado, Massachusetts, Minnesota, New Jersey,
New York, and Pennsylvania (high audit activity)
States with personal income tax on non-residents
States with no personal income tax

Prolonged Recession
Easier to tax non-residents (non-voters!)
Better methods to analyze
transactions & identify who owesPLUS >
WHY NOW?

Media Attention
Tax Firm Emphasis
WHY NOW?

How Big?
…..
…….
HOW BIG?
New York State: $4.9B (7% of budget)
BIG 4 example:
$1.3M annual U.S. exposure

COST OF NON-COMPLIANCE
1. Payment of withholding tax owing
PLUS
2. Penalties of up to 100% of withholding tax owing
PLUS
3. Interest
NEW YORK STATE

Execute multi-jurisdictional payroll
each payroll period
across our entire employee population
THE MISSION

Hard payroll cycle (TIME)
Varying regs by state (COMPLEXITY)
THE ENEMY

We need trip details ASAP to calculate workdays
BEATING TIME
Data available in real time (as it is booked)
No need to harass travelers
Travel system
is the answer! >

BEATING TIME
ALSO:
Cancelations and itinerary changes
Connecting flights
Purpose of travel

States with no tax
Reciprocity
Withholding required in state?
Technical & practical thresholds
BEATING COMPLEXITY

States with no tax
If ONLY all states had no income tax!
Travel days in these states are treated as
workdays in the employee’s home state for
payroll purposes.
STEP 1: STATES WITH NO TAX

Reciprocity
An agreement between individual states.
DEPENDENT on home state.
If applicable - travel days in these states are
treated as workdays in the employee’s
home state for payroll purposes.
STEP 2: STATE TAX RECIPROCITY

Withholding required in state?
STEP 3:CORPORATE NEXUS
Employer requirements ONLY apply if
organization has payroll nexus in the state
If applicable - travel days in these states are
treated as workdays in the employee’s home
state for payroll purposes.

Technical & practical thresholds
Rules and regulations differ in EVERY state.
Blend of technical and practical is often a
good approach.
STEP 4: TECHNICAL & PRACTICAL

SOLUTION
Integrated via Concur App Center

OBJECTIVE
Help customers:
Save time
Automate manual processes to comply
Save money
Eliminate financial risk of penalties

WHAT IT DOES
Speaks to your Concur system
No manual processes
Delivers report each payroll period
Supports your existing payroll process

FLIP THE SWITCH
Rapid deployment by Concur Admin
No linking individual accounts
Syncs as employees book
Includes historical travel

WE CONFIGURE FOR YOU

NO CHANGE TO TRAVEL PROCESS

TRAVEL DATA FOR PAYROLL

TRAVELER SIGN OFF

TRAVELER SUPPORT

ANSWER DELIVERED
“An effective tool must be able to present a picture of exposure within five minutes of
looking at it. Out of all of the various products I had seen, only borderFile did that.”
-Cliffs Natural Resources

EXECUTION
ADP MULTI-JURISDICTION:
Supports multiple worked in states
Temporary configuration per payroll period
Data Import
Fields added to a .csv Pay Data Import File

INTERNATIONAL

FREE ANALYSIS OFFER
EXCLUSIVELY FOR CONCUR CLIENTS
Save over $2,500 by enrolling for a free analysis by November 1st!

Q&A

Vic Arora, CPA, CA
Co-Founder
varora@blacksparkcorp.com
855.667.7275 x701
CONTACT US–
Concur.com/AppCenter

RESOURCES
The New York Times – States Look Beyond Borders To Collect Owed Taxes:
http://www.nytimes.com/2010/03/22/business/22tax.html?pagewanted=all&_r=0
The Financial Times – Rise in mobility is a business risk:
http://www.ft.com/intl/cms/s/0/781bc3e0-5f25-11e2-8250-00144feab49a.html#axzz2Z6vGyYuO
CNNMoney – The business traveler tax threat:
http://money.cnn.com/2013/06/28/pf/taxes/business-traveler-tax-threat/index.html
2011 Deloitte Payroll Operations Survey:
http://www.deloitte.com/assets/Dcom-
UnitedStates/Local%20Assets/Documents/us_consulting_DeloittePayrollSurveyResults_121611.pdf
EY T Magazine – A personal risk for corporate travelers:
http://tmagazine.ey.com/insights/a-personal-risk-corporate-travelers/
Webinar by Ceridian and the American Payroll Association focussed on this topic (this presentation was
followed up with in depth sessions held by the APA at this year’s Payroll Congress Conference):
http://www.ceridian.com/resources/webinars-ondemand/managing-state-income.html

Payroll Compliance for Business Travelers

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